Bank of America near sale of tower
Boston Properties is said to offer $600m for site
Bank of America Corp. has reached a tentative deal to sell its 37-floor skyscraper in Boston’s Financial District to Boston Properties Inc. for about $600 million, according to people familiar with the agreement.
The move underscores Boston Properties’ position as one of the area’s largest landlords. The Boston-based real estate investment trust owns 53 buildings in the area, including the two tallest office towers in Boston: the John Hancock Tower and the Prudential building. The latest deal would give Boston Properties ownership of the sixth-tallest building in Boston, at 100 Federal St.
The reddish-brown tower, known for its distinctive bulge above its base, has been a symbol of Boston banking since it was built in 1971. It served for decades as the headquarters of Bank of Boston and its successor, FleetBoston Financial, before Bank of America bought Fleet in 2004. It is now one of Bank of America’s largest buildings.
Bank of America spokeswoman Kelli Raulerson declined to comment on the deal with Boston Properties. But Raulerson noted that the bank is considering selling office buildings across the country.
Two weeks ago, Bank of America announced plans to sell three high-rises in New York and Charlotte, N.C., where the bank is headquartered. And Bank of America has said it was considering selling the Boston office tower as well.
Many companies lease, rather than own, their real estate so they can focus on their core business and invest their capital elsewhere. And Bank of America specifically has been in the process of selling billions of noncore assets and narrowing its focus over the past few years.
“We are looking at streamlining our operations,’’ Raulerson said. “Real estate is not a core business of Bank of America.’’
Still, Raulerson said any deal to sell the Boston office tower would not affect local employees, because it would lease back its space from the new owner, just as it has agreed to do in New York and Charlotte.
The bank, which has 7,000 employees in Massachusetts, occupies about 60 percent of the building. Other prominent tenants in the building include the Boston College Club on the 36th floor.
Boston Properties declined to comment.
This is not the first time the building has changed hands. The bank that originally owned the tower, Bank of Boston, sold the building to Equitable Life Assurance Society of the US for $363 million in 1984. But Fleet agreed to buy the building back for $366 million in 1999 when it bought Bank of Boston in 1999.
This time, the bank appears to have found a buyer almost as soon as it tapped real estate services firm Cushman & Wakefield to sell the building, a sign of the strength of the market for commercial real estate in downtown Boston. Cushman declined to comment.
Many institutional investors and real estate companies have been eager to buy buildings with solid tenants that can yield a steady source of income. And occupancy rates have remained relatively high in downtown Boston in part because the economy is stronger here than in the nation as a whole and because there were not many new buildings added to the Boston skyline during the real estate boom.
“The fact that you could execute a sale so quickly is indicative of the liquidity of the market,’’ said Lisa Campoli, an executive vice president at Colliers International, a commercial real estate firm with offices in Boston.
Buyers have recently scooped up other prominent office towers in Boston. Exchange Place, a slightly smaller building at 53 State St., fetched $610 million in December. And 33 Arch St. sold for $365 million last year.
In addition to Boston Properties, Equity Office of Chicago continues to control many prominent buildings in the region, including South Station, a 34-story tower at 225 Franklin St., and a 32-story tower at 100 Summer St.